Regional Newspapers

Helen Goodman Excerpts

Wednesday 5th December 2012 Westminster Hall

[Helen Goodman (Bishop Auckland) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Hood. I extend my congratulations to the hon. Member for Burton (Andrew Griffiths). I know that he has an exceptionally beautiful constituency, because once upon a time I applied to be the Labour candidate there. I am sure that we will take it back from him—notwithstanding the good speech he made this afternoon.

Many hon. Members have pointed to the great importance of local newspapers to local communities. That is partly because such newspapers hold democratic institutions—councils and health authorities—to account and report on courts. If local newspapers are not there, no one will do that vital work. It is also partly about building local identities. Notwithstanding whatever marvellous local newspapers hon. Members have, none could be better than the inestimable Teesdale Mercury. Like The Northern Echo, which has run some extremely successful campaigns—it is running campaigns against the cuts from the Department for Education as we speak—it is a fantastic local newspaper.

We have consensus over the importance and significance of local newspapers, but these are challenging times. Circulation of local newspapers has fallen in every year since 2005 and it is difficult for the newspapers to deal with the secular trends. The move to the web is obviously a major structural challenge, not only in terms of people getting their news from the web, Twitter, social media and so forth, but due to the very significant loss in advertising revenue from people advertising on websites—to my mind somewhat foolishly. If someone has a piano to sell, for example, it is much better to advertise in the local newspaper, because somebody who is near enough to come and collect it might decide to buy it.

There are secular trends and background issues, but, as my hon. Friends the Members for Hayes and Harlington (John McDonnell) and for Great Grimsby (Austin Mitchell) pointed out, the behaviour of some of the large newspaper chains has not helped the situation. One problem has been that they were looking for rates of return that were simply not sustainable. Twenty years ago, some local newspapers were making 30%, so the big international chains, which my hon. Friends mentioned, borrowed money from the banks to buy more newspapers. They promised the banks that those huge returns, which I shall set in context, would continue.

Last year, Johnston Press made a 12% return before tax. In any other area of economic life, 12% would be a fantastic return. Compare it to Tesco, the most successful retailer in Britain—from a profit point of view—which made 6%. The reason the newspaper industry is in a mess is because its business model requires it to keep paying masses of interest to the banks. That is why they are stripping out the assets, stripping out the quality journalism, which my hon. Friends mentioned, and getting rid of the printing presses, as my hon. Friend the Member for Sunderland Central (Julie Elliott) described, all of which reduces the quality.

I support hon. Members who called for a meeting to discuss the issues, because we need to look constructively at financial models that reflect economic realities. The economic reality is that they are making 12% and people want to buy their local newspaper, but the finances have been messed up—to put it as politely as possible.

I shall turn to the proposals in Lord Justice Leveson’s report. The Minister has been involved in recent negotiations between the Prime Minister, the Secretary of State for Culture, Media and Sport and the newspaper editors, so I wish to ask him a couple of questions about how the negotiations are coming along. Across the parties, we are agreed that, after the tragic treatment of the Dowlers and the McCanns and the scandals uncovered by Lord Justice Leveson, we need to move to a new system. We are agreed that we need independent self-regulation, but the Opposition have yet to persuade the Government that that should be underpinned by statute. Lord Justice Leveson has set out how that might be done.

I hope that the Minister will not suggest that the independent self-regulation he wants will be less burdensome than the statutory backing that we are looking for because, if I may say so, that would undermine the Government’s case that the independent self-regulation they are negotiating with newspaper editors will be sufficiently tough. In this discussion, let us not pretend that statutory underpinning would have a significantly different economic impact on regional newspapers. I remind hon. Members, who may not have read all 4,000 pages of the Leveson report—

[Andrew Griffiths]

Two thousand.

[Helen Goodman]

In thousands of pages, Lord Leveson has proposed that when newspapers that have joined the independent body are sued for defamation, they should first go to a simple arbitration system—that would be much less burdensome for people than going to court—and, in such cases, newspapers would have the advantage of lower costs, as would the victims who were seeking redress. Signing up to the system would therefore reduce the cost of fighting defamation cases for newspapers, which is the incentive for them to join it.

The quid pro quo that Lord Leveson has suggested is that, for the new arbitration system to be regarded as valid, the new independent self-regulator must be truly independent and must follow certain criteria. We are agreed that we do not want the new regulator to be particularly bureaucratic or burdensome. As we have heard, although such newspapers as the Teesdale Mercury are owned by individuals, others are part of large chains that have resources. We need to attend to that argument, but it is not a clincher.

It is reasonable to consider whether fines should be proportionate to turnover, rather than the Daily Mail being given the same fine as the Teesdale Mercury, which is plainly not sensible. We should look at that, as we should at having less bureaucracy. We also need to consider the possibility raised in The Observer at the weekend about whether, within the Leveson framework, local newspapers might have a different independent self-regulator. I do not know whether that is a good idea, but it should be explored in the cross-party talks.

Will the Minister agree that independent self-regulation is not a punishment? It is not about punishing people, but about setting up a stable new system that will balance the importance of a free press with the need for a proper system of redress for victims. I hope that he will also confirm that whether or not we have statutory underpinning is irrelevant to how bureaucratic the new system is, and that we are all looking to have as unbureaucratic a system as possible.

Finally, to return to previous discussions about local newspapers, I do not think we have yet heard the Government’s view on traffic notices. I am sure that the Minister will recall that utilities and local authorities are currently required to put notices about digging up the roads into local newspapers, which is a major source of income for some of them. There has been some concern about the suggestion that those notices should move to the web, meaning that that income would fall.

I again congratulate the hon. Member for Burton on securing this debate. I was pleased to hear my hon. Friends’ analysis of the situation, and I look forward to hearing the Minister’s answers to my questions.